Archive for the ‘Real Estate’ Category

I’ve blogged about it more elsewhere but here’s the link to the article. The reporter called me when Ann and I were out getting her new glasses. My phone was nearly out of juice so I had to buy a recharger and plug it in near a bench to make sure I didn’t miss her call.

Ann found me, waiting like a typical husband, and thought it funny. Anyway, the lady called while we were driving home (and connected to the car charger) and I gave her great copy. She was very gracious, emailed me to clarify a quote, and then sourced me three different times in the article.


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I was going to have my 2nd appearance on ABC World News tonight. The usual drill: the producer calls in the late morning, Ronnie and Ann drop everything to find me, and multi task by reaching the producer and a client that fits the story. I speed home to get changed, meet them at my listing in Mt Vernon, and then we shoot. I’ve learned to hope that when this happens to hope for a slow news day, because the last time the Space shuttle delayed the story running for a week.

Alas, it was not to be. Some piece of garbage in Texas just shot up Fort Hood. Lots of deaths. Such a horrendous tragedy, and one of the casualties is my TV appearance. Thoughts and prayers for the real victims.

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Imagine that you are a single income household. After years of renting, you and your spouse decide to buy a home. You get pre approved for a mortgage, find a home, make an offer, negotiate a deal, pay for a home inspection, pay for an appraisal, and then you get a peculiar call from the lender. Your loan has been denied. The reason? If you die, your spouse, currently a student, won’t be able to pay the mortgage. Could this happen? No, not a world where equal housing opportunity is the law of the land.

UNLESS…you are buying a co op. Co ops, you see, are the last bastion of Jim Crow in housing. How can this be? Because co op owners do not actually own the land or structure, but are instead shareholders in a private corporation, co op boards use their application process as a fig leaf to circumvent fair housing laws. Co op boards can determine what minimum down payment you’ll need, whether you can rent or use the unit as a 2nd home, and even make you pay extra for things like the use of an air conditioner. Does requiring a minimum down payment of 20% exclude otherwise qualified members of minority groups? Is the Pope German? Many boards still require an interview, where they can literally manipulate the complexion of who gets to live in the building.

Back to my opening scenario. I have clients, let’s call them Nick and Mortimer, who are going to their co op interview this week. A board member who has reviewed their application mentioned to Nick that Mortimer’s financials were  on the light side and told him that he would be asked what would happen should he die, since Mort clearly was not qualified to fly on his own. Nick, a first time home buyer, wondered aloud why this would be an issue; he has a more than ample life insurance policy with Mort as the beneficiary, and Mort earns his Masters this August and will enter the work world this autumn. Well, he was told, they will probably ask that question on the 17th. When I first heard from Nick that he should expect this question, I asked aloud if Ward Cleaver would ever be denied housing because June was a housewife. I think we all know that the answer is "no."

I dislike legislating special rights for some, and I dislike it when people play the victim card. However, I really abhor a double standard where the bar is arbitrarily raised for someone who is a little different. And if you are going to hide behind the small print of the law to be a bigot, I might just publish your name and company right here. And I might not stop there.

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The talk on the street is sometimes more of an indication of how things are than the reporting, although I blogged a few days ago that this was irresponsible journalism. A number of blogs have sprung up that are dedicated to the bubble/correction theme in the housing market. This one addresses my own area. If you are wondering what this guy’s take is on things, just check out the blogroll.

  • Northern Jersey Bubble
  • Housing Panic
  • Bubble Meter
  • The Housing Bubble Blog
  • House Bubble
  • Another F@$#&d Borrower
  • These forums have dozens and sometimes hundreds of comments from people who say they are sitting out buying property until prices come down. If that is any indication of the caution I am experiencing firsthand from the buying public, I don’t see house values increasing anytime soon.

    As I said yesterday, there is a certain amount of vitriol toard real estate licensees, and occasionally with good reason, but by and large I see the the slowdown issue as more related to raw affordability and massive taxation. Rates are still low, but only in the context of history, not the past 5 years. It all adds up to sellers having to understand that the thing had to slow down at some point.

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    Killing the Messenger

    The slowing down of the real estate market has gotten some people’s dander up toward real estate agents. Here is a quote and my response from one of the discussion forums of the local rag.

    I was wondering why we pay by commission. I mean is it more work to sell a more expensive house.When my house goes up in price why do you get a raise????

    I think agents and brokers serve a purpose, but this commission thing kinda bothers me. Especially when the price they tell you they can sell it for[appraisal] is just the price someone has already paid in your neighborhood. Not too difficult. I think most people know what the number is before they call.

    Being a RE agent is like a 40 hr course and real simple. I took it and passed with flying colors as did most people who took the course with me.

    My response:

    I agree and disagree.

    I agree that it is far, far too easy to get licensed. We have experienced 5+ years of amateurs entering and often botching up deals in the hot market. Problem is, efforts to make it harder or more expensive have been considered discriminatory. Catch-22.

    I edited your quote and know that you aren’t objecting that brokers get paid, but more about the ostensibly large numbers by percentage. Here is the deal I make with sellers if they want to pay me a modest fee for my guidance and expertise instead of a % commission: I’ll do that in a heartbeat. Just don’t ask me to advertise the house, because $400 NY Times ads are not in the budget. And those glossy 3 page color brochures you want in ample supply? No can do. Besides, the house down the road just sold and everyone must therefore know all about your house by osmosis, especially after the guy that sold it lied about his price at a cocktail party. You want me to recommend someone to help you remove 20 years of cat piss from your carpets? Here’s a phone book. What’s that? The variance hearing for your illegal shed is next Thursday? Good luck! You want to know why I didn’t get you an update at 8:30 am Friday after we spoke for 45 minutes 9:30pm Thursday? Here’s the update: Everyone went to bed and woke up.

    I could go on, but if you just bought or sold, look at your HUD-1 and look who got paid what just because they showed up besides the broker who held your hand through every piece of arcane minutiae for 6 months. I’d be more concerned with the attorney/government money grab, with Albany skimming 1% off the top for the NYS transfer tax, the attorney who collected 1000-1500 for taking a week to return your phone calls, the title insurance company charging you multiple thousands for a service that actuarial charts mandate a few hundred (just what are the odds that the Algonquins will come back to claim your 70 year old subdivision land?), and the town and county making you pay 3, 5, or 10k in taxes in advance. The lawyer/government/banker cabal often equals or exceeds commissions. Some states don’t even use attorneys for real estate, but every state uses agents. Go figure.

    I don’t sympathize with people who tell me "but my agent stunk. They didn’t do anything for their paycheck." Those people often should have known better than to entrust a $600,000 transaction to their cousin Mel or sister in law who just got licensed and learned the ropes on their backs. People who do their homework and get a good agent never complain about commissions.

    I could go on, but I am off to work.

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    A 6/22 article in the local rag opens with this:

    It’s over.

    The crazed phase of frenetic home buying in Westchester, Rockland and Putnam counties has screeched to a halt — leaving some industry experts wondering if the sound they hear now is the housing bubble bursting.

    "The market isn’t soft. It isn’t even slow. It’s dead," said Liz Rosenblatt, an agent with Fuerst & Fuerst Inc., a real estate firm in New Hempstead.

    I don’t mean to pick on Ms. Rosenblatt, but MLS stats have her involved in fewer than a dozen title transfers since 2002. That’s 10 sales in 5 years. Couldn’t the paper have chosen someone with a tad more experience than two sales a year to quote?

    True, title transfers are down 19% from 2005, but according the to Westchester County Board of REALTORS, 2005 was also a record-breaking year. One piece of chatter among full-time real estate licensees is that the slowdown will weed out the overpopulation of part time agents who have come along for the ride since 2001. In a hot market, even agents with poor skills can pick fruit from the many low hanging branches. In a tougher market, the bigger fish rule the pond. Thinning the agent herd will be a good thing.

    In fairness to the Journal News, the reporter for this article chose an excellent broker to quote.

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    Hitting the Fan

    The sales statistics for homes sold in my area for the first quarter of 2006 are out, and sales are down from the first quarter of 2005 by 14%. This, coupled with higher interest rates means that the pool of buyers is shrinking, which suppresses appreciation. Add to this the growing inventory from the lower sales rate, and, all together now, the boom is over. Oh, one more thing: in the next 18 months, millions of variable rate mortgages which started out as fixed for 2, 3 or 5 years will hit their adjustment period. This will flood the market with even more inventory as people try to jettison mortgages which they can no longer afford. Foreclosures will spike, putting more properties up for sale, and the bank-owned REOs will elbow out a significant number of regular folks who wish to sell and who may find themselves unable to get the price they need.  Guess when this really hits the fan? 2008, which, by the way, is a presidential election year.

    If you don’t want Hillary to be president, you better pray hard that they catch bin Laden, because that’s the only thing that will turn things around for this administration. 

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